The chairman of empowered committee on Goods and Services Tax (GST) Sushil Kumar Modi on Monday called for the protection of a financial autonomy of states and formulate an appropriate incentive model as followed by countries like Singapore and Canada. Modi, at a meeting with the industry representatives organised by Ficci, said states want protection for their revenues while safeguarding the interests of small traders with shift to the GST regime. “States however, want clarity on revenue neutral rate, threshold revenue limit and dual control,” Modi said. “Already three sub committees have been formed to make recommendations in this regard and we expect reports during next meeting of the empowered committee slated for May 10 & 11 at Mussoorie.

States have pitched for a tax rate which will ensure that there is no loss in revenue during transition to GST. Further, states have their own views on dual control wherein they are quite worried that small traders may have to bear additional compliance cost in the wake of says of central and state government,” he added. Modi said the threshold limit of Rs 10 lakh, beyond which GST will be levied upon traders, may be reworked considering high inflation.